Dáil Éireann Debate, Tuesday - 13 January 2026
836. Deputy Brian Brennan asked the Tánaiste and Minister for Finance the reason a person (details supplied) was refused a refund on some VAT items; if the Revenue Commission will reconsider a VAT refund for the items; and if he will make a statement on the matter. [74862/25]
Amharc ar fhreagraThe VAT treatment of goods and services is subject to EU VAT law, with which Irish VAT law must comply. In accordance with the EU VAT Directive, farmers can elect whether or not to register for VAT in respect of their farming business, and each farmer’s decision on this matter affects how VAT incurred on their inputs (such as the purchase of farm equipment) is treated.
Under VAT law, farmers can avail of the Flat-rate Farmers Scheme and remain unregistered for VAT. This arrangement, which is unique to the farming sector, allows farmers to remain unregistered for VAT and yet be compensated on an overall basis for the VAT they incur in the course of their business, while still remaining outside the VAT system and avoiding the burden of registration and filing.
Generally, businesses that are not registered for VAT are not permitted to reclaim any VAT they incur. However, in addition to the compensation for flat-rate farmers provided by the Flat-rate Scheme, Irish VAT law also permits flat-rate farmers to reclaim VAT they incur on some particular business expenditure, as set out in the 2012 Refund Order. The Refund Order is permitted under EU law, subject to certain conditions, including that its scope is not extended. This means that the order may not be altered to permit refunds of VAT incurred on farming business costs that are not currently provided for in the order.
The Order allows flat-rate farmers to claim refunds for VAT incurred on the following farming business expenditure:
a) the construction, extension, alteration or reconstruction of farm buildings or structures;
b) the fencing, draining or reclamation of farmland; and
c) the construction, erection or installation of qualifying equipment for the micro-generation of electricity for use in the farm business.
Expenditure incurred by flat-rate farmers on any other farming business inputs, such as farm equipment or machinery, such as cluster removers, does not come within the scope of the Refund Order.
However, where the installation of farming equipment requires the alteration or reconstruction of a farm building or structure, the corresponding expenditure on the alteration or reconstruction of the building or structure including equipment or elements of equipment permanently installed in the farm building or structure may be allowed in certain circumstances. The equipment must be permanently installed in the farm building or structure and once installed, cannot be removed without causing significant damage, or destruction to the farm building or structure or to the equipment itself. Cluster removers are items of farm equipment that are not installed/do not require installation in farm buildings or structures to the extent that their removal would cause significant damage to the item or the building or structure itself. Accordingly, it is Revenue’s position that expenditure on these items does not qualify for a refund under the Refund order.
The claim in question (details supplied) has been returned to the claimant as Revenue is seeking further information/clarification in respect of the claim.
I am advised that the requested information has not yet been received by Revenue. Once all requested information is received in relation to the claim, it will be further considered in accordance with the terms of the Order as set out above, and a final decision will issue to the claimant. In the event the claimant is dissatisfied with the decision, they may appeal that decision to the Tax Appeals Commission, which is an independent statutory body that determines appeals against assessments and decisions of the Revenue Commissioners, including decisions to refuse claims under this Refund Order.
